Divorcing - Need to Pull Out Equity

[Tokala]

Hi people,

I'm in a bit of a dilemma, I am going through a divorce and would like to keep the home and pay the wife $50k as a property split through pulling out equity in the house.

Westpac
Variable Loan: $65k
Fixed @7% for 3 more years: $258k
Total Loan Value: $323k

Value of House: $400k

I earn $85k a year, have a $17k car loan ($500 per month payment), and child support payment of $640 a month.

Currently I am living with my mother to help her out, as my father just died 2 weeks ago. I am in the process of renting out the house, and have been advised by RE that I can get $430-450 a week in rent.


I visited the local Westpac Home Lender who had me fill in details for a Top Up Loan.
This then went no where and she passed me onto a different Home Lender at a different Westpac Branch, who wanted to start a whole new loan for the variable loan instead of just a Top Up.

What are my best options for obtaining the $50k in equity?
Do I have to go through Westpac (who are really annoying me), or can a broker help me?
Should I wait until I have a renter signed up, or is an estimate of the income through renters good enough?
Can the variable loan be swapped to Interest only?

Thanks in advance for any help given.

 

[Peter_Tersteeg]

What are my best options for obtaining the $50k in equity?
Do I have to go through Westpac (who are really annoying me), or can a broker help me?
Should I wait until I have a renter signed up, or is an estimate of the income through renters good enough?
Can the variable loan be swapped to Interest only?

* You're already leveraged to 80%. To access $50k you'll need to pay some mortgage insurance as you're probably looking at 90% in total lending. If you've paid mortgage insurance in the past this might be mitigated.

* Brokers can write Westpac loans. You're not limited to the branches.

* A written estimate for the property's potential rental income should be sufficient.

* You should be able to switch the loan to interest only.

Most likely you don't want to switch lenders because you don't way to pay the exit penalties on the fixed loan. Also because you probably don't want to cancel the fixed loan, you ex may have to stay on the loan (and probably the title) until the fixed term ends.

It's potentially a bit messy, but if your ex wants the $50k she should be agreeable to it.

 

[Tokala]

Thanks for the reply PT_Bear, you've helped to take a bit of stress out of my life.

Yes, we paid mortgage insurance when we originally got the loan, and we realise that the ex will be on the loan.

 

[geoffw]

Stress is right. Two if the biggest stress events in short succession. Take some time to look after yourself as well.

 

[Tokala]

Thanks geoffw I will, I just want to get this loan stuff sorted out to get the ex off my back.
Then I can relax and start planning my future.

 

[Terry_w]

Thanks for the reply PT_Bear, you've helped to take a bit of stress out of my life.

Yes, we paid mortgage insurance when we originally got the loan, and we realise that the ex will be on the loan.

Is she on title? Now may be the opportunity to remove her stamp duty free and CGT free.

 

[Tokala]

I don't think I can yet Terry, as this has not gone through the courts yet, so there is nothing official to show that we are divorcing.
The divorce is amicable and we have decided upon the $50k.
Once the money is in my bank I can pressure her to get this divorce finalised.
Well, that is my plan anyhow.

 

[Terry_w]

I don't think I can yet Terry, as this has not gone through the courts yet, so there is nothing official to show that we are divorcing.
The divorce is amicable and we have decided upon the $50k.
Once the money is in my bank I can pressure her to get this divorce finalised.
Well, that is my plan anyhow.

Talk to your lawyer about this as there are a few ways to do so. Stamp duty for example you have to convince the commission that the relationship has broken down.

If you do a property settlement later that means reapplying for the loan again and paying LMI again posisbly.

 

[TMNT]

I don't think I can yet Terry, as this has not gone through the courts yet, so there is nothing official to show that we are divorcing.
The divorce is amicable and we have decided upon the $50k.
Once the money is in my bank I can pressure her to get this divorce finalised.
Well, that is my plan anyhow.

I wouldnt count on her being amicable for ever,wait till she talks to a feminist lawyer or a couple of her friends tell her how much she can get due to personal experience or hearing down the grape vine

 

[Tokala]

haha yeah, I have heard all the stories.
I am actually helping her by trying to take over the loan.
If I don't and we have to sell, then $20k disappears to Westpac due to break costs on the fixed part of the loan.

Thank you Terry, I will look into this.

I should be able to service a $375k loan going off the above details, shouldn't I?

 

[Terry_w]

I wouldnt count on her being amicable for ever,wait till she talks to a feminist lawyer or a couple of her friends tell her how much she can get due to personal experience or hearing down the grape vine

TMNT - You must be a male?

 

[Jake D]

TMNT - You must be a male?

He's actually a small group of mutated turtles with skills in martial arts.

 

[TMNT]

TMNT - You must be a male?

im green, I have a shell on my back, I eat heaps of pizza, I live in the sewers, unfortuantely, all the radioactive material I search for has removed all my hormones

Edit: and I swing around weapon like bruce lee

 

[rowena]

not all women are greedy back stabbing bi**atch**es...

and they want a amicable agreement too!.

 

[Bigtone]

not all women are greedy back stabbing bi**atch**es...

!.

and some people win tattslotto but its pretty rare!

whatever u do don't give her the cash b4 agreeing and signing a settlement agreement. i have seen this dozens of times, they take the cash and then the lawyer says "actually no agreement in place" and then go for the rest of the assets. remember family court lawyers are the scum of the earth and will do anything to drag this on and make as much money for themselves as possible once they get involved.

Sign agreement and get title in your name now, i have seen westpac hold the fixed rate and switch to one owner and continue loan term and also maintain LMI credit from original loan in divorce cases.

 

[wylie]

not all women are greedy back stabbing bi**atch**es...

and they want a amicable agreement too!.

and some people win tattslotto but its pretty rare!

And men NEVER do the wrong thing in divorce, never hide money, never downplay their earnings to pay less than they should, never refuse to pay maintenance AT ALL... EVER.

 

[datto]

Yep.

 

[S.T]

whatever u do don't give her the cash b4 agreeing and signing a settlement agreement. i have seen this dozens of times, they take the cash and then the lawyer says "actually no agreement in place" and then go for the rest of the assets. remember family court lawyers are the scum of the earth and will do anything to drag this on and make as much money for themselves as possible once they get involved.

Sign agreement and get title in your name now, i have seen westpac hold the fixed rate and switch to one owner and continue loan term and also maintain LMI credit from original loan in divorce cases.

All this! I think you need a Binding Financial Agreement, or they will come back for more at some point in time. If you haven't already, I would engage a family law specialist lawyer.

 

[beachgurl]

With all this talk it seems like I could have some fun on my hands if we end up going down the property settlement path

On the tax front is there a special exemption at the moment? We r having a 6 month separation before considering asset division.

 

[thatbum]

remember family court lawyers are the scum of the earth

Scum of the earth here.

Yes I do recommend seeing a family lawyer - but also to try learn as much about family law and its procedures as you can. A lot of the casework and preparation can be done by a layperson once given some guidance by a lawyer - which can save a lot in terms of legal fees.